How can you improve the value of your Amazon business?
You can automate it, you can improve the relationships with your suppliers – and you can also clean-up your finances.
In this article, we’ll be taking a look at the importance of clean financials when it comes to selling your business – and how it can impact your online store’s valuation.
Clean financials are accurate financials. Your accounts are all correct, your numbers are spot-on, and everything is consistent with how your business is running.
The idea is that even someone who has zero knowledge when it comes to finances is able to come along, take a look at your records, and understand it all without any confusion.
Not just that, but it also means that your reports are verifiable. In other words, if you were audited, the auditor would be able to confirm that everything is accurate.
Clean financials are important because they allow your business to grow. You don’t have to keep looking over your shoulder, wondering what your shareholders and investors might have to say about your numbers. Instead, you know exactly how well (or badly) your business is faring, and you know what you need to do going forward.
And when it comes time to sell your business, having accurate financials helps to increase trust between you and any potential buyer. They can see exactly how your business is performing, and they won’t be bewildered by complex (and poorly executed) reports and statements that can deter them from making an offer.
Small mistakes can easily create big problems for you. Here are some ways you can make your financials cleaner:
Do you have debt that’s over a year old? If it is, does it still need to be on your books?
If there’s no need for it to be there, now might be the time to get rid of it as this will help to limit your tax obligations.
If your book values of your assets are different from your actual values, you will have super messy books on your hands.
It happens – a business overvalues or undervalues their assets, with the consequence being that they either pay too much tax, or they take home unearned deductibles.
If you’ve never performed a correct evaluation on your asset values, now’s the time to call in an accountant and get this sorted ASAP.
If you want to keep your books balanced and appeal to buyers and investors, it’s key that you aim for double-sided accounting.
Essentially, your business assets must = your liabilities + shareholder equity. If it doesn’t, your finances won’t be as clean as they need to be.
Not sure how to do this? Work with an accountant.
If you want to scale your business, take it to the next level and even position it so that you can sell it for a good price, now is the time to start working on your finances.
Once you’ve done a spring clean and got your books in order, make sure to do a daily check-in on your finances and make maintaining cleaner books a standard procedure at your business.
Ready to sell your business for the best possible price? Start by clicking the link below! No obligation, no hard sell. Just solid, professional advice.